U.S. Hunger for Yogurt Leads to Gigantic Factory

By STEPHANIE STROM - New York Times - Chobani, the yogurt company that grew from nothing five years ago to a roughly $1 billion powerhouse today, on Monday will formally open one of the world’s largest yogurt-processing plants in Twin Falls, Idaho. “I’m so excited,” said Hamdi Ulukaya, founder and chief executive of Chobani. “I’ve been waiting for this moment for so long.” The $450 million, 1 million square-foot plant is the company’s second. It will employ 300 people, and Mr. Ulukaya said for every 10 jobs it creates directly, it is expected to create roughly 66 additional jobs in ancillary businesses. “The state expects the total economic impact of our business there to be $1.3 billion,” he said.

In exchange, Chobani qualified for a variety of state tax incentives, including property tax exemption and credit off tax liabilities. Idaho’s position as one of the country’s largest milk producers and the transportation network around Twin Falls also were attractions, Mr. Ulukaya said.

The new plant is yet another sign of America’s growing appetite for yogurt and its willingness to embrace new brands over old, as evidenced by Chobani’s explosive growth as well as that of Fage and now, Muller Quaker Dairy, a joint venture between PepsiCo and Unternehmensgruppe Theo Muller, a privately held German dairy company.

The Muller Quaker Dairy products are currently sold only between Boston and Washington, D.C., and in the Great Lakes region.

That has led some to worry about oversaturation, but Mr. Ulukaya said there is still plenty of room for growth. “Americans still eat far less yogurt than people in other parts of the world,” he said.

He said some retailers are even increasing the amount of refrigerated shelf space they allot to yogurt to accommodate all the new brands and varieties that are popping up.

Chobani plans to take advantage of that with more product lines manufactured in its new plant. The biggest breakthrough is the Chobani Champions Tube, just over two ounces of low-fat Chobani Greek yogurt with fruit purée packed into a tube that requires no spoon.

“Natural, with no preservatives, no coloring, nothing ugly in there, perfect for lunch bags, with Chobani’s thickness and creaminess,” Mr. Ulukaya said. “Moms are going to love it, and I’m afraid I’m going to be eating it that way all the time from now on.”

The new plant also will turn out the Chobani Bite, a small cup of yogurt, 100 calories or less, sold in a cluster of four and intended for snacking. “I’m going to keep the flavors of these a surprise,” Mr. Ulukaya said, but they “will have some kind of a bite to them.”

The third new product the plant will be responsible for is the Chobani Flip, a square package with one corner containing nuts, granola, dried fruits or other ingredients that can be added to the yogurt.

The plant will supply those products to the entire country and traditional six-ounce and larger containers to the West, while the New York plant will continue to supply the traditional products in the East.

“I can still remember packing the first 300 cases in the fall of 2007,” Mr. Ulukaya said. “It took us all night to do it because the filler didn’t work very well, just me and Kyle, who’s now the executive vice president of sales,” he said, referring to Kyle O’Brien. “It’s been an amazing journey.”